BILL NUMBER: ACR 2	CHAPTERED  08/23/99

	RESOLUTION CHAPTER   79
	FILED WITH SECRETARY OF STATE   AUGUST 23, 1999
	ADOPTED IN ASSEMBLY   AUGUST 19, 1999
	ADOPTED IN SENATE   AUGUST 16, 1999
	AMENDED IN SENATE   JULY 8, 1999
	AMENDED IN ASSEMBLY   APRIL 6, 1999

INTRODUCED BY   Assembly Member Papan
   (Principal coauthor:  Assembly Member Machado)
   (Principal coauthor:  Senator Burton)
   (Coauthor:  Assembly Member Alquist)

                        JANUARY 6, 1999

   Assembly Concurrent Resolution No. 2--Relative to creating the
Joint Committee to Investigate Financial Institution Mergers and
Acquisitions.



	LEGISLATIVE COUNSEL'S DIGEST


   ACR 2, Papan.  Financial institutions:  investigating committee.
   This measure would establish a Joint Committee to Investigate
Financial Institution Mergers and Acquisitions.




   WHEREAS, According to an article by Daniel Kadlec in the December
7, 1998, issue of Time Magazine, Amadeo Peter Giannini "found himself
at odds with other directors of Columbus Savings and Loan Society
who had little interest in extending loans to hard working immigrants"
; and
   WHEREAS, Amadeo Peter Giannini "... also made a career out of
lending to out-of-favor industries... including California's wine and
movie industries"; and
   WHEREAS, In 1904, because Mr. Giannini was at odds with his fellow
bankers and their reluctance to extend banking services and loans to
working immigrants and small businesses, he formed Bank of Italy in
San Francisco, California; and
   WHEREAS, A. P. Giannini eschewed personal wealth for fear of
losing touch with the people he wished to serve; and
   WHEREAS, According to writer Kadlec, "A. P. Giannini always
encouraged his employees and customers to become shareholders and to
fully participate in the success of the bank"; and
   WHEREAS, Banks established in California over many decades have
and had grown and prospered with the State of California; and
   WHEREAS, These banks have or had evolved into multinational
corporations, maintaining their corporate headquarters in California;
and
   WHEREAS, These banks obtained their early, critical
expansion-inducing deposits from the people of California and have or
had continued to draw much of their financing from all of
California; and
   WHEREAS, The people of California, recognizing the mutuality of
interests in having a vital business and personal banking industry in
the state, have or had endeavored, over the years, to accommodate
and facilitate the expansion and economic health of these banks; and
   WHEREAS, The people of California have or had taken a certain
pride in watching their banks grow and thought of them as their
banks; and
   WHEREAS, These California banks through "mergers" but more
properly identified as "acquisitions" have been gradually taken over
by foreign (other state) banks and their headquarters have been
located outside of California; and
   WHEREAS, Mergers and acquisitions of in-state banks by foreign
(other state) banks and holding companies have traditionally resulted
in the acquired bank's gradual withdrawal from community
involvement; and
   WHEREAS, Community involvement by local financial institutions
provides more interest in and development of those local communities;
and
   WHEREAS, California, being the sixth largest economy in the world,
should be the headquarters of national and international banks; now,
therefore, be it
   Resolved by the Assembly of the State of California, the Senate
thereof concurring, That the California Assembly and Senate hereby
express their serious concern over mergers and acquisitions of
California banks by foreign (other state) banks and holding companies
and the removal of financial institution headquarters from
California; and be it further
   Resolved, That the Assembly and Senate further express their
serious concern over the loss of local branches and financial
institution services in California; and be it further
   Resolved, That there is hereby created the Joint Committee to
Investigate Financial Institution Mergers and Acquisitions; and be it
further
   Resolved, That the committee shall commence a study of the
potential impact of the removal of the corporate headquarters of
banks from California and whether the state would be well advised to
withdraw funds currently deposited in those banks in order to ensure
that these funds best serve the people of the State of California;
and be it further
   Resolved, That it shall be the purpose of the committee to
investigate and determine the detrimental consequences to the State
of California, its agencies and departments, and its inhabitants
resulting from financial institution mergers and acquisitions, and if
the committee finds that these activities have resulted in damage to
the state, its people, or its institutions, it shall ascertain and
recommend available methods or sanctions to correct the wrongs; and
be it further
   Resolved, That the committee shall particularly address the
effects of mergers and acquisitions in the areas of community
investment, charitable contributions, related social activities, and
advancement opportunities for women and minorities; and be it further

   Resolved, That the committee shall investigate and determine how
to provide incentives for national and international banks to make
their headquarters in California; and be it further
   Resolved, That the committee shall examine the financial
institution industry, sizes of financial institutions in California,
and their participation in California communities' development; and
be it further
   Resolved, That the committee shall examine access to financial
services as a result of mergers and acquisitions and the number of
branch closures by type and size of affected communities; and be it
further
   Resolved, That the committee shall examine methods of allowing
independent community and local financial institutions to participate
in the moneys of the State Treasurer's Pooled Money Investment
Account and other state financial business; and be it further
   Resolved, That the committee shall examine the need for
people-to-people contact and the role of philanthropy; and be it
further
   Resolved, That the committee shall examine the changes in niche
markets and whether they are being filled by new charters so that
there are minimal exposures and an available safety net; and be it
further
   Resolved, That the committee shall examine the impact upon public
revenue as the result of removal of a major financial institution
headquarters from California to another state; and be it further
   Resolved, That the committee shall consist of five Members of the
Assembly appointed by the Speaker of the Assembly and five Members of
the Senate appointed by the Senate Committee on Rules; that a Member
of the Assembly shall chair the committee; and that the chairperson
shall appoint committee staff; and be it further
   Resolved, That the committee and its members shall have all of the
rights, duties, and powers conferred upon investigating committees
and their members by the Joint Rules of the Senate and Assembly as
they are adopted and amended from time to time, which rules are
incorporated herein and made applicable to the committee and its
members; and be it further
   Resolved, That the Assembly Committee on Rules may make money
available from the Assembly Operating Fund as it deems necessary for
the expenses of the Joint Committee to Investigate Financial
Institution Mergers and Acquisitions; and be it further
   Resolved, That any expenditure of money shall be made in
compliance with policies set forth by the Assembly Committee on Rules
and shall be subject to the approval of the Assembly Committee on
Rules; and be it further
   Resolved, That the Joint Committee to Investigate Financial
Institution Mergers and Acquisitions shall, within 15 days of
authorization, present its initial budget to the Assembly Committee
on Rules for its review, comment, and approval; and be it further
   Resolved, That the Chief Clerk of the Assembly transmit a suitably
prepared copy of this resolution to the author for appropriate
distribution.
